Arbitrary Dismissal

I live in Dubai. In July 2014, I joined a company as operations manager. In the first week of November this year, I was told by the owner that my services were being terminated due to cost-cutting. I was told to come back after a week to settle my dues and complete the formalities. However, when I returned, they refused to issue a letter citing cost-cutting as reason for termination. They asked me to sign the visa cancellation papers, or face a labour ban. They terminated other employees similarly. The owner claimed that I should have paid for my own expenses when travelling on company work since I was getting commission. The fact is that when I travelled abroad in the past year, the company made my hotel reservations. Now, the owner claims he never authorised it. He threatened to deduct all my travel expenses and refused to pay me anything — no annual vacation pay for 2016, no gratuity and no notice period compensation.

I filed a case citing unfair termination before the Ministry of Human Resources and Emiratisation. At the first hearing, the company said my services were not required anymore. At the second hearing, however, they claimed that my services were not terminated and that I did not go to office on my own account.

I may lose my case in a court because the company is not giving me a written termination and also not permitting me to enter the office. The company is also threatening to cancel my visa and impose a ban against me. In March, I took a loan from the company. As per the UAE labour law, can an employer terminate the services of an employee who has taken a loan from the company?


If the questioner cannot obtain his rights through the Ministry of Human Resources and Emiratisation, he can ask the ministry to refer the complaint to a competent court where he will get an opportunity to prove his case. Secondly, a labour ban does not apply to the questioner as he has completed more than two years in service. Finally, the UAE labour law does not prevent an employer from terminating the services of an employee who has taken a loan from the company provided that there is valid reason for the termination.


How is severance pay calculated?

I have worked in a company for more than a year on an unlimited labour contract. Now, I want to change jobs as another company is offering a better salary and benefits. I submitted my resignation. Upon calculating my end-of-service benefits, I was informed that I will only be paid one-third of severance pay. A colleague who resigned and has the same number of years in service as me received his severance pay in full. Is this in accordance with the labour law? My company did not allow me to serve the notice period. Do I have the right to claim compensation?


Article 137 of the UAE Labour Law states: “Where a worker who is bound by a contract of unlimited duration leaves work of his own accord after continuous service of not less than a year and not more three years, he shall be entitled to one-third of severance pay provided for in the preceding article; where the continuous period of service exceeds three years, but does not exceed five years, he shall be entitled to two-thirds of such severance pay; where the continuous period of service exceeds five years, he shall be entitled to full severance pay.”

Finally, the employer is not obliged to pay the employee for notice period if he does not want the employee to serve it provided it is the employee who terminates the labour contract.


Questions answered by advocate Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants.